WILLIAMS v. COMMISSIONER

2002 T.C. Memo. 111, 83 T.C.M. 1601, 2002 Tax Ct. Memo LEXIS 117

Opinion

TED L. WILLIAMS, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent

WILLIAMS v. COMMISSIONER

No. 12404-00L

United States Tax Court

T.C. Memo 2002-111; 2002 Tax Ct. Memo LEXIS 117; 83 T.C.M. (CCH) 1601;

May 3, 2002, Filed

---

Respondent's motion for summary judgment granted. Order granting respondent's motion and decision sustaining respondent's determinations and imposing penalty will be entered.

Ted L. Williams, pro se.

Joanne B. Minsky, for respondent.

Chiechi, Carolyn P.

---

CHIECHI

MEMORANDUM OPINION

CHIECHI, Judge: This case is before the Court on respondent's motion for summary judgment (respondent's motion). We shall grant respondent's motion.

             Background

The record establishes and/or the parties do not dispute the following.

Petitioner resided in Jacksonville, Florida, at the time he filed the petition in this case.

Petitioner filed a Federal income tax (tax) return (return) for his taxable year 1995, which showed $ 8,125.87 as the tax due for that year. When petitioner filed his 1995 return, he did not pay the amount of tax due shown in that return.

On April 28, 2000, respondent issued to petitioner a final notice of intent to levy with respect to petitioner's taxable years 1995, 1996, and 1997 (final notice of intent to levy). Thereafter, petitioner requested a hearing with the Internal Revenue Service Appeals Office (Appeals Office) with respect to that notice.

On October 18, 2000, the Appeals Office held a hearing with petitioner with respect to the final notice of intent to levy. ¹ Prior to having been assigned to conduct the Appeals Office hearing with respect to the final notice of intent to levy, the Appeals officer who conducted that hearing had had no relationship with petitioner and had not had any involvement with petitioner's taxable year 1995.

Prior to the Appeals Office hearing, the Appeals officer obtained coded and noncoded (so-called "plain English") versions of computer-generated transcripts (transcripts) of respondent's records with respect to petitioner. Those transcripts identified petitioner, the type of tax assessed, the taxable period, the date of the assessment, and the amount assessed. At the Appeals Office hearing, the Appeals officer relied on the transcripts for the purpose of verifying that respondent made a valid assessment with respect to petitioner's taxable year 1995. The Appeals officer provided to petitioner a copy of the plain English version of those transcripts at the Appeals Office hearing.

On October 30, 2000, the Appeals Office issued to petitioner a "NOTICE OF DETERMINATION CONCERNING COLLECTION ACTION(S) UNDER SECTION 6320 and/or 6330" (notice of determination). That notice stated in pertinent part:

   (1) The only legal requirements before taking general

   enforcement action are the notice & demand and the notice of

   intent to levy and the notice of right to a collection due

   process hearing. The assessments were made, and notice & demand

   for payment, under IRC6303(a), were sent to your last known

   address, along with Publication 1, your rights as a taxpayer.

   You neglected or refused to pay the taxes and penalties due.

   Subsequently, you were sent the LT11 dated 4/28/2000. The

   Automated Collection System followed all legal & procedural

   requirements and the action proposed is appropriate under the

   circumstances, with regard to the income tax due for 1995 only.

   (2) The issues raised by you on your request are that, for the

   income tax due for 1995, you did not earn the alleged taxable

   income. For the Civil Penalties for 1996 & 1997, that the

   penalty is not based on agency records. With regard to the

   income tax due for 1995, the tax was assessed via a tax return

   filed by you on 4/15/1996, showing total tax due of $ 8,125.87.

   The information that you have provided regarding your position,

   including the information presented by you at your hearing on

   10/18/2000, did not change our position that we have a valid

   assessment for 1995. However, with regard to the civil penalties

   assessed for 1996 (4@$  500), and 1997(1@$  500, they cannot be

   considered under the collection due process procedure, because

   they have a separate appeal procedure under Penalty Appeals.

   Therefore, they will be considered under that procedure, and you

   will be notified of the result. Any other issues raised by you

   were determined to be not applicable to our consideration of

   this case.

   (3) The proposed collection action for 1995 balances the need

   for the efficient collection of the tax with your legitimate

   concern that any collection action be no more intrusive than

   necessary. [Reproduced literally.]

             Discussion

The Court may grant summary judgment where there is no genuine issue of material fact and a decision may be rendered as a matter of law. Rule 121(b); ²Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), affd. 17 F.3d 965 (7th Cir. 1994). We conclude that there is no genuine issue of material fact regarding the questions raised in respondent's motion.

The validity of the underlying tax liability for 1995 is not at issue in this case. ³ Consequently, we shall consider the matters addressed in respondent's motion using an abuse-of- discretion standard. Sego v. Commissioner, 114 T.C. 604, 610 (2000); Goza v. Commissioner, 114 T.C. 176, 182 (2000).

In the petition, petitioner alleged that (1) "the IRS failed to make an assessment in accordance with the requirements of the IR Code and underlying regulations" and that (2) "the procedural due process requirements were not met, since the IRS did not conduct a fair and impartial hearing before an impartial decision maker." Petitioner did not allege in the petition (1) any facts to support petitioner's allegation that he did not receive "a fair and impartial hearing before an impartial decision maker" or (2) any irregularity in respondent's assessment procedure with respect to petitioner's taxable year 1995.

In his response to respondent's motion (petitioner's response) and in his affidavit in support of that response (petitioner's affidavit), petitioner abandons the allegations set forth in the petition. Instead, he advances the types of arguments and contentions that we find to be frivolous and groundless and that the courts have repeatedly rejected. ⁴

In respondent's motion, respondent contends that the Appeals officer's reliance on the transcripts to verify that respondent made a valid assessment with respect to petitioner's taxable year 1995 satisfies the requirements of section 6330(c)(1) that the Appeals officer obtain verification that the requirements of any applicable law or administrative procedure have been met. That is because, according to respondent, (1) those transcripts contained all of the information required under section 301.6203-1, Proced. & Admin. Regs., ⁵ and (2) petitioner failed to show any irregularity in respondent's assessment procedure with respect to petitioner's taxable year 1995.

Respondent further contends in respondent's motion that petitioner received a fair hearing before an impartial decision maker as required by section 6330(b). ⁶ That is because, according to respondent, the Appeals officer "had no involvement with petitioner's case prior to receiving the file because a request for a CDP hearing was filed. * * * [The Appeals officer] also had no prior relationship with petitioner."

We agree with respondent. Section 6330(c)(1) does not require the Commissioner of Internal Revenue to rely on a particular document to satisfy the verification requirement imposed by that section. ⁷ We have held that, absent a showing by the taxpayer of an irregularity in respondent's assessment procedure, it was not an abuse of discretion for the Appeals officer to have relied on certain computer-generated transcripts for purposes of complying with section 6330(c)(1). ⁸ On the record before us, we find that the Appeals officer's reliance on the transcripts to verify that respondent made a valid assessment with respect to petitioner's taxable year 1995 did not constitute an abuse of discretion. On that record, we further find that the facts that are undisputed for purposes of respondent's motion establish that petitioner received a fair hearing before an impartial decision maker.

Based on our examination of the entire record before us, we find that respondent did not abuse respondent's discretion in determining in the notice of determination to proceed with collection with respect to petitioner's taxable year 1995. On that record, we shall grant respondent's motion.

Although respondent has not requested a penalty under section 6673(a)(1), this Court is authorized to impose such a penalty in an amount not to exceed $ 25,000 in cases where it appears to the Court that, inter alia, a proceeding before it was instituted or maintained primarily for delay, sec. 6673(a)(1)(A), or the taxpayer's position in such a proceeding is frivolous or groundless, sec. 6673(a)(1)(B). In Pierson v. Commissioner, 115 T.C. 576, 581 (2000), we issued an unequivocal warning to taxpayers concerning the imposition of a penalty under section 6673(a) on those taxpayers who abuse the protections afforded by sections 6320 and 6330 by instituting or maintaining actions under those sections primarily for delay or by taking frivolous or groundless positions in such actions.

In the instant case, petitioner advances, we believe primarily for delay, frivolous and groundless arguments and contentions, thereby causing the Court to waste its limited resources. We shall impose a penalty on petitioner pursuant to section 6673(a)(1) in the amount of $ 1,000.

We have considered all of petitioner's arguments and contentions which are not discussed herein, and we find them to be without merit and/or irrelevant.

To reflect the foregoing,

An order granting respondent's motion and decision sustaining respondent's determinations and imposing a penalty under section 6673(a)(1) will be entered.

---

Footnotes

• 1. Although the Appeals Office hearing was held with respect to the final notice of intent to levy, which pertained to petitioner's taxable years 1995, 1996, and 1997, petitioner petitioned this Court only with respect to his taxable year 1995. Our discussion hereinafter relates only to petitioner's taxable year 1995.

• 2. Unless otherwise indicated, all Rule references are to the Tax Court Rules of Practice and Procedure. Unless otherwise indicated, all section references are to the Internal Revenue Code in effect at all relevant times.

• 3. Although not altogether clear, petitioner may have challenged the underlying tax liability for 1995 at the Appeals Office hearing. However, petitioner did not raise any challenge to that liability in the petition. Consequently, petitioner is deemed to have conceded the underlying tax liability for 1995. See Rule 331(b)(4); Lunsford v. Commissioner, 117 T.C. 183, 186 (2001).

• 4. By way of illustration, petitioner's response asserts, inter alia:

     1. The Affiant [petitioner] can not serve two masters. The

     Affiant has a divine covenant with the Affiant's Creator

     [Exodus 23: 32 and 34: 26] protected by the common law and

     the Constitution for the united States of America.

     2. The Affiant has made a formal Declaration of Allegiance to an

     American Republic and cancelled the nationality that is held

     under the 14th amendment (U.S. citizenship) * * * the affiant

     never gave express consent to be or become a citizen and

     national of the United States: and, has declared allegiance to

     the republic/Florida state and claim sole nationality thereof.

             *   *   *   *   *   *   *

     WHEREFORE * * * the Respondent's motion for summary

     judgment must be denied and vacated for lack of authority over

     Affiant and that no bona fide contract exists between the

     Respondent and Affiant. [Reproduced literally.]

  Petitioner's affidavit asserts, inter alia:

     4. The federal United States government has been

     operating under the Wars Powers Act since 1861. The United

     States Supreme Court is not a judicial court, but a member of

     the Executive Branch under Martial Law (Supreme Court Rules

     45.1). * * *

     12. The [Internal Revenue] Service was never created by an Act

     of Congress and is listed as an agency, sub-agency or sub-

     department of the Department of the Treasury in 31 USC

     301 et seq. The Service is an "alter ego" for

     "Common Law Trust #62" which is registered in Puerto Rico,

     and is therefore inside the jurisdiction of Washington D.C. The

     actual, physical headquarters of the Service is in

     the Virgin Islands. * * *

     22. The only regulations promulgated by the Secretary to

     implement his collection authority are found at 27 CFR

     Part 70 and pertains only to matters regarding alcohol, tobacco

     and firearms.

     26. The Service is not in possession of any record maintained

     under the Privacy Act that shows that the Affiant is a

     "Taxpayer".

     27. The Service is not in possession of any record maintained

     under the Privacy Act that the Affiant has ever

     "volunteered" (without treats, duress and

     coercion by the Service) to file a federal 1040 tax return.

• 5. Sec. 301.6203-1, Proced. & Admin. Regs., provides in pertinent part:

     The assessment shall be made by an assessment officer signing

     the summary record of assessment. The summary record, through

     supporting records, shall provide identification of the

     taxpayer, the character of the liability assessed, the taxable

     period, if applicable, and the amount of the assessment. * * *

     If the taxpayer requests a copy of the record of assessment, he

     shall be furnished a copy of the pertinent parts of the

     assessment which set forth the name of the taxpayer, the date of

     assessment, the character of the liability assessed, the taxable

     period, if applicable, and the amounts assessed.

• 6. Sec. 6330(b) provides in pertinent part:

  SEC. 6330. NOTICE AND OPPORTUNITY FOR HEARING BEFORE LEVY.

  (b) Right to Fair Hearing. --

  (3) Impartial officer. -- The hearing under this subsection shall be conducted by an officer or employee who has had no prior involvement with respect to the unpaid tax specified in subsection (a)(3)(A) before the first hearing under this section or section 6320. A taxpayer may waive the requirement of this paragraph.

• 7. E.g., Lindsey v. Commissioner, T.C. Memo. 2002-87; Kuglin v. Commissioner, T.C. Memo. 2002-51.

• 8. E.g., Howard v. Commissioner, T.C. Memo. 2002- 81; Kuglin v. Commissioner, supra; Mann v. Commissioner, T.C. Memo. 2002-48.